Methodology - Society for Human Resource …2018 General Industry Middle Management, Professional and Support Compensation Survey Report - U.S. Methodology Job Matching Methodology

2018 General Industry Middle Management, Professional and Support Compensation Survey Report - U.S.

Methodology

Job Matching Methodology The Willis Towers Watson survey methodology is an integrated process combining elements from each of our two proprietary leveling methodologies, Career Map and the Global Grading System (GGS). The combination yields a unique and systematic approach to matching jobs that encompasses the concept of career progression through Career Levels with differentiated job size as determined by Global Grades. See the Career Bands and Career Levels section for further details.

● Career Map - The Willis Towers Watson Career Level methodology is based on a series of Career Bands, each with a number of distinct Career Levels. Career Bands enable companies to structure work and jobs based on progressive levels of expected contribution. Career Levels represent discernible broad steps in a career progression, which are consistent across organizations. They reflect the normal market progression of jobs requiring higher levels of competence and knowledge as people advance in their careers.

● Global Grading System - The Willis Towers Watson Global Grading System (GGS) measures the relative internal

value of distinct jobs within a company according to specific dimensions and aligns those values with quantifiable differences in pay levels in the external marketplace. Global Grades, which are linked to organization size, reflect the impact of size on job scope at higher levels, thus enhancing data comparability across organizations of varied size. Global Grades create a single top-to-bottom framework to facilitate leveling and drive consistency across Career Bands, Functions and Disciplines. They provide the foundation, or underpinning, for both Executive Benchmarks and the broad-based Career Levels and define the start and end points of a career progression.

The job matching process consists of the two steps outlined below. Step 1. Align your organization's levels to survey levels:

● Assign Career Bands, Career Levels and Global Grades to your nonexecutive jobs Step 2. Match your organization's jobs to Functions and Disciplines Alternatively, to match your jobs using a benchmark approach, reverse steps 1 and 2 (i.e., match your organization's jobs to Functions and Disciplines and then determine the survey levels). Matching guidelines are included at the end of this section. For additional support matching jobs in your organization, contact your local Willis Towers Watson Data Services representative.

Willis Towers Watson Data Services


Methodology

Job Matching Methodology (continued) General Alignment of Global Grades to Career Levels For purposes of this survey, seven or eight Career Bands (depending on the survey) have been identified. Within each of the Career Bands there are four to six Career Levels, which span six to eleven Global Grades. The following General Alignment Map of Global Grades to Career Levels provides an overview of how Global Grades align with Career Levels, without reflecting the impact of organization size.

NOTE: The job matching methodology presented here is for survey purposes only and is not a rigorous job evaluation process. Although this survey methodology is related to the Willis Towers Watson Career Map and Global Grading methodologies, it may not align directly with specific client implementation of one of these leveling methodologies. Therefore it is critical to align your internal levels to the survey levels based on a careful review of the survey definitions to ensure proper job matching.



Methodology

Job Matching Methodology (continued) Step 1. Assign a Career Band to Your Jobs To select the Career Band, determine if the job in your organization is:

● Supervisor/manager or individual contributor

● Professional or support

● Technical support, business support or production/manual labor The following decision tree illustrates the process for identifying the appropriate Career Band. Career Band Summary Descriptions are included in the Career Bands and Career Levels section.

Assign Career Levels General profiles for each Career Level within a Career Band can be found in Career Bands and Career Levels, section. The indicative Global Grade alignment is also noted. For those Career Levels aligned with two Global Grades, brief language is provided to highlight the key differences between each of the Global Grades. North America survey participants need only match to Career Levels since individual Global Grades are not collected; therefore, the Global Grade differentiators are shaded.



Methodology

Job Matching Methodology (continued) If your organization does not have an established internal structure, skip the next subsection and match specific jobs to the Career Bands and Career Levels. Distinguish Executives and Managers Distinguish whether incumbents should be matched to an Executive Benchmark or the Supervisory/Management Career Band using the guidelines in the following table. Executive (EX) Supervisory/Management (M)

Organization Strategy

Primarily involved in the development, evolution and approval of the long-term vision across a market function, division, region or country (depending on scope of organization) or a Function

Establishes strategies for area of responsibility (i.e. corporate, regional, subsidiary)

Leads development of country or function strategies

May be a board or executive committee member or will have a comparable level of influence

Implements organization strategies through the effective direction and management of resources

Sets Discipline or area strategy consistent with established organization strategies

Focuses mainly on the management and implementation of operational objectives that help achieve long-term organization strategy

Accountable for business, functional, operational processes and/or program management

Functional Responsibility

Most senior level within a major Function for a business unit

Responsible for part of a Function for a business segment

Impact on Organization

Impacts broader organization performance directly Impacts broader organization performance indirectly

Impact limited to own Discipline or area

Compensation Program

Covered by executive compensation programs (e.g., executive long-term plans, executives bonus plans)

Not covered by executive compensation programs



Methodology

Job Matching Methodology (continued) Distinguish Managers and Individual Contributors Jobs below the executive level can be matched as either Managers or Individual Contributors. These jobs are differentiated on the basis of the types of work activities and staff they manage. To distinguish whether incumbents should be matched to the Supervisory/Management Career Band or the Professional (Individual Contributor) Career Band use the guidelines in the following table. Manager Professional/Individual Contributor

Job "manages" projects or programs through teams of individuals who may not report directly to them

At higher levels of project management, individuals in these roles may be managing large, sustained projects or programs, with dedicated teams to support them.

Project management is a body of skills and expertise; project managers achieve work objectives by applying these skills and expertise to guide a team. At lower levels of project management, the focus is on professional project management skills, and individuals in these roles may manage multiple projects and/or projects with shorter duration.

Job "manages" a body of work within the organization that is large enough to constitute an organizational function or subfunction.

Jobs that provide organization-wide functional or subfunctional leadership, for the body of work. This will not be necessarily through direct reports, but through dotted-line reports. The 'weight' of dotted-line reporting can be assessed through factors such as frequency and nature of the communication, the coordination processes and the area of influence.

Jobs that focus on "managing" a body of work or a process are applying individual expertise. Such jobs require that a job holder has a specific level of knowledge or skills in a particular subject of critical value to the organization's business strategy. There is no requirement on the job to provide wider leadership beyond acting as the "custodian" of the knowledge

Job "manages" long-term vendors and/or contractors.

A job is achieving results through others if:

Work/role of the vendor/contractor is enduring

Similar roles elsewhere within the organization accomplish similar work through internally-employed individuals

Work includes monitoring the performance and directing the work of individual contributors who are not managed by a person on the vendor/contract side

Work includes coaching and developing others for task completion, performance or career growth

A job is achieving results through application of individual expertise if:

Work is focused on managing the parameters (e.g., service levels, compliance, policy interpretation) of the contract/vendor relationship (i.e., work is not focused on managing the vendor's employees)

The vendor/contract management role/work is short-term in nature, intended to fill a temporary staffing gap, peak volume period or conduct work on a specific short-term project

Job has "matrix management" responsibilities.

A job is achieving results through others if:

There is recognition within the organization that a person has responsibility for "managing" individuals on a team

The job is specifically accountable for the output and performance of a team of individual contributors

The job has significant influence on how the individuals under management focus their time and energy

There is frequent communication to discuss expectations and provide performance feedback and coaching

There is a high degree of participation on formal management responsibilities related to hiring, firing, performance reviews, compensation decisions, etc.

A job is not achieving results through others if:

The job does not have significant responsibilities for administrative aspects of people management (e.g., hiring, performance reviews, etc.)

The job acts as a consultant to a team of individuals focused on a particular body of work or project



Methodology

Job Matching Methodology (continued) Distinguish Professional, Technical Support, Business Support and Production/Manual Labor Jobs below management can be matched to the Professional, Technical Support, Business Support or Production/Manual Labor Career Band. These jobs are differentiated on the basis of the types of duties and the education or training required to perform them.

Individual Contributor

Professional (P)

Support

Technical Support (T)

Business Support (U)

Production/ Manual Labor

(W)

Entry Level Education/Training

Has conceptual knowledge of theories, practices and procedures typically acquired through a college or university degree or equivalent work experience

Requires vocational training or equivalent experience and may require external certification, but typically does not require a university degree

May require vocational training or equivalent work experience, but does not require a university degree

Typically does not require vocational training or a university degree

Types of Duties and Responsibilities

Performs work in a specialized area of expertise that requires knowledge of fundamental themes, principles and concepts

Performs specialized technical tasks or skilled craft work

Performs clerical, administrative or specialized support tasks in an office, field or retail store/site setting

Performs unskilled or semi-skilled work



Methodology

Job Matching Methodology (continued) Align Career Levels to Your Internal Structure The number of levels/grades/bands in your organization may vary from the Career Levels in the survey.

● If your organization has an internal level, grade or banded structure you should first compare and align your internal structure to the survey Career Bands and Career Levels. Mapping your internal structure first saves time. If your organization does not have an established internal structure, skip this subsection and match specific jobs to the Career Bands and Career Levels.

● Where your internal grades/bands have a mixture of individual contributor/manager/sales jobs, individual jobs should be used to determine the appropriate mapping.

● If your organization has more levels than the number of Career Levels, you will have to collapse more than one of your levels into one Career Level. For example, an organization could have jobs in two levels that correspond to and would be matched to a single Career Level.

● If your organization has fewer levels than survey Career Levels you will have to allocate your jobs between the two applicable Career Levels. For example, if your organization uses a broadband approach a single band may correspond to more than one Career Level.

● If your organization either maintains a different structure for select Functions or adjusts for certain levels within a Function (e.g., Research and Development, Sales) note these special circumstances when matching to those Functions in Step 2.

Additional Guidelines for Assigning Career Levels

● There is no requirement to match jobs at all Career Levels within a Function. Some organizations may not hire at entry level, but focus on more experienced employees. Most organizations are unlikely to have a Renowned Expert (P6).

● In less hierarchical organizations, not all levels of management may exist in some Functions.

● The Supervisor (M1) coordinates the daily activities of technical, business or production/manual labor support

employees. The Manager (M2) coordinates the activities of professional staff in an assigned work area and/or manages first-line supervisors (M1).

● The Senior Manager (M3) is typically a second-level manager.

● The Senior Group Manager (M5) is typically only found in organizations with revenue greater than $10 billion.

● Renowned Experts (P6) and Elite Experts (S6) are rare and reserved for the highest level Experts in very large

organizations. These incumbents are internally and externally recognized as gurus and should be in Functions that are of strategic importance to the business.



Methodology

Job Matching Methodology (continued) Step 2 - Match Your Organization's Jobs to Functions and Disciplines Review the Function and Discipline descriptions in the Report Resources section to identify the best match for the content and purpose of your organization's job. Once you have identified the Function, select the Discipline that corresponds to the area of specialization. In each Function, one or more Disciplines designated as generalist/multidiscipline have been defined. Each Function has a generalist/multidiscipline code (Discipline suffix "000"), and some Functions have additional generalist/multidiscipline codes that apply to a subgroup of Disciplines within a Function. Use the generalist/multidiscipline code in the following circumstances:

● Incumbents perform more than one of the specialized Disciplines in the Function as part of their normal responsibilities, OR

● Managers are responsible for employees in more than one Discipline within that Function. Each Function has a No Applicable Discipline code (Discipline suffix "999"). You should use this code if the incumbent's specialization cannot be classified in any of the defined Disciplines or cannot be identified. Once you have matched all your jobs to Functions and Disciplines, review your Career Level matches to ensure they are consistent across Functions Job Matching Guidelines General Guidelines Keep the following guidelines in mind throughout the job matching process.

● Match jobs based on content, not titles.

● Exclude expatriates paid on their home-country rates. Include foreign nationals paid on host-country rates, but exclude any supplemental payments not part of the typical local compensation pay package.

● Exclude contract staff not paid on the same terms as permanent, full-time staff.

● Level matching is comparable to benchmark matching. Identify how your jobs map into the levels defined in the survey, choose the appropriate Function and identify the Discipline.

● The primary focus of the matching process is on job content relative to the survey definitions for Career Bands, Career Levels, Functions and Disciplines.



Methodology

Job Matching Methodology (continued) Career Bands and Career Levels This section provides the documentation and tools needed to match your jobs to the survey levels. As described in Survey Job Matching Methodology section, the level-based approach to job matching involves assigning a Career Band and Career Level to your jobs. The tools listed below are provided to help match your jobs to the appropriate survey levels.

● Career Band Summary Descriptions present descriptions for each of the eight Career Bands:

● Supervisory/Management (M)

● Revenue Generating (R) [Financial Services Only - FCE Function Only]

● Professional (P)

● Customer/Client Management and Sales (S)

● Medical Representation (V) [Pharma Only - CMR Function Only]

● Technical Support (T)

● Business Support (U)

● Production/Manual Labor (W)

● Career Level General Profiles provide definitions for the Career Levels within each Career Band.

● The Global Grade(s) aligned with each level also are noted. Global Grade differentiators are shaded, since North America survey participants need only match to Career Levels. Individual Global Grades are not collected in North America.

● Organization Size Alignment Maps provide distinct alignment maps that display how the organization (also the

CEO or Business Unit Head) Global Grade dictates the availability of Career Levels and Global Grades for four organization size groups. As shown, larger organizations can match to more Global Grades in the Executive, Supervisory/Management and Professional Career Bands to reflect the additional levels of management and complexity of technical expertise required to operate their businesses.



Methodology

Job Matching Methodology (continued) Career Bands, Global Grades and Career Levels (continued) NOTE: The job matching methodology presented here is for survey purposes only and is not a job evaluation process. Although this survey methodology is related to the Willis Towers Watson Career Map and Global Grading methodologies, it may not align directly with specific client implementation of one of these leveling methodologies. Therefore, it is critical to align your internal levels to the survey levels based on a careful review of the survey definitions to ensure proper job matching. Career Map and the Global Grading System, when formally implemented, enable the alignment of reward and talent management programs across businesses. When used as internal leveling tools, these methodologies take into account the specific organizational context of a job and the detailed set of associated accountabilities and demands. The outcomes of these processes are highly organization-specific, while survey job descriptions and levels are by their nature generic. Therefore, organizations that use Career Map or the Global Grading System as their internal leveling tool are still required to match their jobs to this survey using the job matching process outlined in this report. An organization's internal Global Grade or Career Level may act as a starting point, but as the Career Levels and Global Grades contained in these surveys represent a typical or generic organization, there may be differences between the internal value a specific organization places on a job and where the job should be mapped for purposes of external comparison. General Alignment Map of Global Grades to Career Levels



Methodology

Job Matching Methodology (continued) Career Band Summary Descriptions Supervisory/Management Career Band (M) ● Accountable for managing people, setting direction and deploying resources; typically is responsible for performance evaluation, pay

reviews and hire/fire decisions ● Results are primarily achieved through the work of others and typically depend on the manager's ability to influence and negotiate

with parts of the organization where formal authority is not held ● Progression within Career Band reflects acquisition of broad technical expertise, business and industry knowledge, and process and

people leadership capabilities ● Accountable for business, functional or operational areas, processes or programs, which may include dotted-line or

matrixed management

Revenue Generating Career Band (R) [Financial Services Only - FCE Functions Only] Investment Banking and Capital Markets/Corporate Banking ● Requires fully developed business knowledge and understanding of marketplace and clients ● Likely to work on achieving a revenue target, often in highly complex and specialized areas ● At senior levels likely to work as individual contributors in addition to having management responsibilities ● Works with clients to originate and structure complex products often on a geographic or industry basis ● Entry level may be part of a formal training/rotational program, after which an MBA program maybe followed ● At lower levels work is achieved primarily by an individual or teams

Professional Career Band (P) ● Work is primarily achieved by an individual or through project teams, with emphasis on technical/discipline knowledge rather than

managing people ● Requires the application of expertise in professional area(s) to achieve results ● Progression within the Career Band reflects increasing depth of professional knowledge, project management and ability to

influence others ● Entry-level jobs within the Professional Career Band typically require a university degree or equivalent work experience that provides

knowledge of and exposure to fundamental theories, principles and practices

Customer/Client Management and Sales Career Band (S) ● Primarily involved in direct contact with customers/clients to acquire new business or develop existing business or accounts ● Participates in sales presentations, developing bids, and responding to proposals ● At senior levels, likely to set/negotiate product/service terms or contracts ● A significant portion of compensation is likely to be based on sales results

Medical Representation Career Band (V) [Pharma Only - CMR Function Only] ● Primarily involved in direct contact with doctors, nurses, pharmacists and prescribing medical staff to acquire new business or

develop existing business ● At senior levels, likely to have responsibility to set/negotiate product/service terms or contracts unless prohibited by

regulatory restrictions ● Likely to work on a commission/sales target basis

Technical Support Career Band (T) ● Performs specialized technical tasks required to support operations (e.g., IT development, research support, skilled trade) ● Requires vocational training or the equivalent experience and may require external certification but typically does not require a

university degree

Business Support Career Band (U) ● Performs clerical/administrative or specialized support tasks in an office, field or retail store/site setting ● May require vocational training or the equivalent experience, but does not require a university degree

Production/Manual Labor Career Band (W) ● Performs operational or manual tasks, primarily in manufacturing, supply chain or operational environments ● Typically performs unskilled or semi-skilled work ● Typically does not require vocational training or a university degree



Methodology

Job Matching Methodology (continued) Career Level General Profiles

Supervisory/Management Career Band (M)

M5 Senior Group Manager (aligns with Global Grade 17) ● Applies only to large international or global organizations ● Provides leadership and direction through Group and/or Senior Managers ● Has accountability for the performance and results of:

● A large, strategically important function in an extremely large market and/or ● Diverse disciplines (e.g., within Human Resources - Training, Recruitment and Compensation & Benefits) or departments within

a large geography or division and/or ● A large, strategically important discipline within a major region and/or ● A medium-sized global corporate discipline or department

● Develops, adapts and executes strategies to achieve key business objectives in area of responsibility ● Decisions are guided by organization and functional strategies and objectives

M4 Group Manager (aligns with Global Grade 16) ● Provides leadership and direction through Senior Managers and Managers ● Has accountability for the performance and results of:

● A large, strategically important discipline in an extremely large market; and/or ● Related disciplines or a medium-sized function in a large market or medium-sized division; and/or ● A medium-sized discipline or department in a major region

● Adapts and executes functional or departmental business plans and contributes to the development of functional or departmental strategies

● Decisions are guided by functional or major operational segment strategies and priorities

M3 Senior Manager (aligns with Global Grades 14 and 15) ● Provides leadership to managers; may also provide leadership to supervisors and/or professional staff ● Has accountability for the performance and results of multiple related units ● Develops departmental plans, including business, production, operational and/or organizational priorities ● Controls resources and policy formation in area of responsibility ● Decisions are guided by resource availability and functional objectives

Global Grade 15 Differentiators ● Looks beyond existing methodologies and own discipline to define and resolve complex problems ● Develops plans and delivers results in fast-changing businesses and/or regulatory environments ● Provides input to functional or departmental strategy ● Manages large, potentially diverse teams of managers and/or senior professionals ● In Global Grade 16 or 17 organizations, typically contributes directly to business priorities and planning

Global Grade 14 Differentiators ● Identifies applications of functional knowledge and existing methodologies to complex problems ● Manages large teams of professionals and/or junior managers ● In Global Grade 16 or 17 organizations, typically has accountability for a function



Methodology

Job Matching Methodology (continued) Career Level General Profiles (continued)

Supervisory/Management Career Band (M) (continued)

M2 Manager (aligns with Global Grades 12 and 13) ● Manages professional employees and/or supervisors or supervises large, complex support, production or operations team(s) ● Has accountability for the performance and results of a team within own discipline or function ● Adapts departmental plans and priorities to address resource and operational challenges ● Decisions and problem-solving are guided by policies, procedures and business plan; receives guidance from senior manager ● Provides technical guidance to employees, colleagues and/or customers

Global Grade 13 Differentiators ● Accountable for the budget, performance and results of a medium-sized team or multiple small teams of employees ● Exercises full management authority, including performance reviews, pay decisions, recruitment, discipline, termination and other

personnel actions ● Addresses issues with impact beyond own team based on knowledge of related disciplines

Global Grade 12 Differentiators ● Accountable for results of a small team of employees ● Exercises limited management authority; sets employee performance objectives, conducts performance reviews and recommends

pay actions ● Defines team operating standards and ensures essential procedures are followed based on knowledge of own discipline

M1 Supervisor (aligns with Global Grades 10 and 11) ● Coordinates and supervises the daily activities of a support, production or operations team ● Sets priorities for the team to ensure task completion; coordinates work activities with other supervisors ● Decisions and problem-solving are guided by policies, procedures and business plan; receives guidance and oversight

from manager ● Typically does not spend more than 20% of time performing the work supervised

Global Grade 11 Differentiators ● Accountable for the results of a large and/or moderately complex support or production operations team including subordinate

work leaders ● Applies acquired expertise to analyze and solve problems without clear precedent ● Provides input on resource planning and policy development ● Coaches team members on performance, completes employee performance evaluations and recommends pay actions

Global Grade 10 Differentiators ● Accountable for the results of medium-sized routine support or production operations teams ● Solves problems based on practice and precedent ● Trains team members and provides input to employee performance evaluations



Methodology


Revenue Generating Career Band (R) [Financial Services Only - FCE Functions Only]

for Investment Banking and Capital Markets and Corporate Banking Functions

R6 Managing Director (aligns with Global Grades 17 and 18) ● Is recognized as one of the most experienced members of the functional team within the business. Typically has 10 years or more

of experience ● May work independently or have responsibility for the direction of a desk. In addition to management responsibilities, incumbent is

an active individual contributor, often working on the most important and complex accounts/transactions ● Has accountability for the performance and revenue generation of key areas of business or portfolio of products/services on a

geographic or industry group basis ● Individuals at this level have fully developed knowledge of the business, marketplace and clients. Is recognized as an expert within

the organization ● Key contributor to functional strategies and priorities ● Provides leadership and direction through Senior Vice Presidents and Director across multiple activities ● Within investment or corporate banking. May be a senior industry sector specialist or product area specialist, and/or lead a team.

Typically has a minimum of 2 but more commonly 3 years of experience at the Director level

Global Grade 18 Differentiators ● Only applies to large international or global businesses (Global Grade 19 and above) ● Manages diverse teams of Senior Vice Presidents/Directors to generate revenue from a particular product/service range which

represent a large proportion of business in the bank ● Requires fully developed knowledge of the business, marketplace and client's industry and is a recognized expert within the bank

and across the industry

Global Grade 17 Differentiators ● Only applies to large international or global businesses (Global Grade 19 and above) ● Manages multiple teams of Vice Presidents and Senior Associates within a major country/region or industry group ● Requires broad and in-depth knowledge of the business, marketplace and clients and provides expert advice to handle the most

complex accounts independently

R5 Director/Senior Vice President (aligns with Global Grades 15 and 16) ● Typically has at least 2 years of experience as a Vice President, and at least 7 years of total experience. ● May have responsibility for independently (or as a senior member of a team) working with the firm's clients and/or handling

complex transactions ● Is accountable for the performance and revenue generation of multiple disciplines or departments within a major geographical

country/region or industry group ● Individuals at this level have fully developed knowledge of the business, marketplace and clients. Is recognized as an expert within

the organization ● Provides leadership and directions through Vice Presidents and Senior Associates ● Responsible for meeting business targets in assigned areas ● Contributes to the development of functional strategy, and provides leadership and direction

Global Grade 16 Differentiators ● May manage teams of Vice Presidents and Senior Associates within an assigned country/region or industry group ● Requires in-depth knowledge of the business, marketplace and clients and provides expert advice to handle the most complex

accounts independently

Global Grade 15 Differentiators ● Requires specialized knowledge of the business, marketplace and clients. May provide expert advice to handle complex

accounts independently



Methodology


Revenue Generating Career Band (R) (continued) [Financial Services Only - FCE Functions Only]


R4 Vice President (aligns with Global Grades 13 and 14) ● Often considered the first officer level within the organization, individuals in this position will have 5 years or more experience ● Within investment banking, individuals at the Vice President level typically have 3 ½ or more years of experience at the

Associate level ● Has responsibility for revenue generation and working with the organization's clients handling complex transactions; independently

(or as a senior member of a team). ● Individuals at this level have fully developed knowledge of the business, marketplace and clients. Is recognized as an expert in own

area within the organization ● Interprets internal or external business issues and recommends best practices. Provides technical guidance to more junior levels

of staff

Global Grade 14 Differentiators ● Requires good knowledge of the business, marketplace and client industries and provides advice to handle difficult accounts

Global Grade 13 Differentiators ● Independently originates complex products in a specialized geographic area or industry ● Serves as best practice/quality resource ● Provides technical guidance to Associates and Analysts

R3 Senior Associate (aligns with Global Grades 11 and 12) ● Senior Associates continue to develop their knowledge of the business, marketplace and clients ● Responsible for independently executing on-going assigned tasks ● Individuals will have 2 or more years of experience since graduation from an MBA program or possess an equivalent combination of

education and work experience ● Decisions are guided by policies, procedures and business plan; receives guidance from Vice Presidents/Directors

Global Grade 12 Differentiators ● Originates complex products in an assigned geographic area or industry, may receive some supervision ● Frequently contributes to process improvement ● Provides informal guidance to junior Associates and Analysts

Global Grade 11 Differentiators ● May contribute to process improvements ● Carries out complex tasks under supervision

R2 Associate (aligns with Global Grade 10) ● Associates work under the direct supervision of managers or senior producers ● Beginning to develop their knowledge of the business, marketplace and clients ● This category includes entry level MBAs (with a sign-on and actual "stub" bonuses), MBAs with up to 2 years experience, and

"promoted" Analysts who typically have an undergraduate degree but more than 2 years work experience ● Solves a range of straightforward problems; analyses possible solutions using standard procedures



Methodology


Revenue Generating Career Band (R) (continued) [Financial Services Only - FCE Functions Only]


R1 Analyst (aligns with Global Grades 8 and 9) ● Requires a college or university degree ● May be part of a formal training/rotational program on a defined career path to becoming an Associate ● Key criterion is the individual's career track and/or inclusion in a formal "Analyst" program ● Performs routine assignments in the entry level to a professional role ● Develops competence by performing structured work assignments ● Uses existing procedures to solve routine or standard problems ● Receives instruction, guidance and direction from others

Global Grade 9 Differentiators ● Has limited discretion to vary from established procedures ● Has limited work experience involving basic concepts and procedures

Global Grade 8 Differentiators ● Has no discretion to vary from established procedures ● Receives detailed instructions, guidance and direction from others



Methodology


Professional Career Band (P)

P6 Renowned Expert (aligns with Global Grades 16 and 17) ● Is recognized as an external thought leader within strategic function or discipline ● Has broad and comprehensive expertise in leading-edge theories, techniques and/or technologies within own function or discipline ● Proactively identifies and solves the most complex problems that impact the management and direction of the business ● Participates in the development of the product or business strategy ● Leads multidisciplinary projects or initiatives ● Progression to this level is typically restricted on the basis of individual capabilities and business requirements

Global Grade 17 Differentiators ● Only applies to large international or global businesses ● Contributes as top thought leader worldwide, whose achievements include major innovations that change and advance the industry

and/or profession ● Leads the largest projects/initiatives that have a significant impact upon a complex, global business

Global Grade 16 Differentiators ● Typically found in Global Grade 18 or higher organizations ● Contributes thought leadership and innovation that influences change and advancement of the industry and/or profession ● Leads large projects/initiatives that impact the business on a domestic or international scale

P5 Master (aligns with Global Grade 15) ● Is recognized as an expert within the organization and has in-depth and/or breadth of expertise in own discipline and broad

knowledge of other disciplines within the function ● Anticipates internal and/or external business challenges and/or regulatory issues; recommends process, product or

service improvements ● Solves unique and complex problems that have a broad impact on the business ● Contributes to the development of functional strategy ● Leads project teams to achieve milestones and objectives ● Progression to this level is typically restricted on the basis of business requirements ● Typically operates with broad latitude in a complex environment

P4 Specialist (aligns with Global Grades 13 and 14) ● Is recognized as an expert in own area within the organization ● Has specialized depth and/or breadth of expertise in own discipline or function ● Interprets internal or external issues and recommends solutions/best practices ● Solves complex problems; takes a broad perspective to identify solutions ● May lead functional teams or projects ● Works independently, with guidance in only the most complex situations ● Progression to this level is typically restricted on the basis of business requirement

Global Grade 14 Differentiators ● Identifies applications of functional knowledge and existing methodologies to complex problems ● Serves as an expert within own function and discipline ● Leads functional teams or projects and serves as a best practice/quality resource

Global Grade 13 Differentiators ● Guides others in resolving complex issues in specialized area based on existing solutions and procedures ● Serves as an expert within own discipline ● May lead function teams or projects and serves as a best practices/quality resource ● Trains/mentors junior staff



Methodology


Professional Career Band (P) (continued)

P3 Career (aligns with Global Grades 11 and 12) ● Has in-depth knowledge in own discipline and basic knowledge of related disciplines ● Solves complex problems; takes a new perspective on existing solutions ● Works independently; receives minimal guidance ● May lead projects or project steps within a broader project or have accountability for ongoing activities or objectives ● Acts as a resource for colleagues with less experience ● May represent the level at which career may stabilize for many years or even until retirement

Global Grade 12 Differentiators ● Uses best practices and knowledge of internal or external business issues to improve products/services or processes ● Typically resolves complex problems or problems where precedent may not exist ● Often leads the work of small project teams; may formally train junior staff ● Works independently

Global Grade 11 Differentiators ● Contributes to process improvements ● Typically resolves problems using existing solutions ● Occasionally leads the work of small project teams; provides informal guidance to junior staff ● Works with minimal guidance

P2 Intermediate (aligns with Global Grades 9 and 10) ● Has working knowledge and experience in own discipline ● Continues to build knowledge of the organization, processes and customers ● Performs a range of mainly straightforward assignments ● Uses prescribed guidelines or policies to analyze and resolve problems ● Receives a moderate level of guidance and direction

Global Grade 10 Differentiators ● Typically follows prescribed guidelines or procedures to resolve problems ● Has working knowledge of basic concepts and procedures; performs a variety of routine tasks or assignments ● May train new team members and provide input to employee performance evaluations ● Works with a moderate level of guidance

Global Grade 9 Differentiators ● Has limited work experience involving basic concepts and procedures ● Develops competence by performing structured work assignments ● Uses existing procedures to solve routine or standard problems ● Works under supervision and direction from more senior level roles

P1 Entry (aligns with Global Grade 8) ● Performs routine assignments in the entry level of the Professional Career Band ● Typically requires a college or university degree or the equivalent work experience and has conceptual knowledge of fundamental

theories, principles and practices ● Has no discretion to vary from established procedures by performing structured work assignments ● Uses existing procedures to solve routine or standard problems ● Receives instruction, guidance and direction from more senior level roles



Methodology


Customer/Client Management and Sales Career Band (S)

S6 Elite Expert (aligns with Global Grades 16 and 17) ● Is recognized externally as a leading sales strategist and business expert, with a highly sophisticated understanding of customer

needs and competitors' offerings ● Is recognized internally as a role model and leader in planning and executing successful sales strategies for the organization's

largest and most complex clients or markets ● Develops and implements new and innovative approaches to the sales process, including negotiation of sales and service terms,

and approaches to account management and resources utilization ● Leads projects or initiatives that extend beyond the sales organization ● Progression to this level is typically restricted on the basis of individual capabilities and business requirements

Global Grade 17 Differentiators ● Only applies to large international or global businesses ● Manages largest, most strategically important global accounts in a very large organization ● Develops market (including new market) and account sales strategies ● Is recognized as one of the top sales producers in a global organization and in the wider industry

Global Grade 16 Differentiators ● Typically found in Global Grade 18 or higher organization ● Manages large, complex or international accounts in a medium to large organization ● Is recognized as a major sales producer in an international business

S5 Senior Expert (aligns with Global Grade 15) ● Has a complete understanding of business, financials, products/services, the market and the needs/challenges of assigned

accounts; develops colleagues' and customers' understanding; is recognized as an expert in many areas ● Works with large, important or global accounts ● Has full authority/opportunity to set and negotiate product/service terms ● Plans own account management approach and has input into colleagues' approaches; manages own and often others' resources ● Progression to this level is typically restricted on the basis of business requirements

S4 Expert (aligns with Global Grades 13 and 14) ● Has a deep understanding of business, financials, products/services, the market or the needs/challenges of assigned accounts ● Develops colleagues' and customers' understanding ● Recognized as an expert in one or more areas ● Works with complex or high profile territory/account, products/services, sales or account management process; serves as team lead ● Has broad authority/opportunity to set and negotiate product/service terms ● Plans own territory or account approach and has input into colleagues' approaches; manages own and often others' resources ● Progression to this level is typically restricted on the basis of business requirements

Global Grade 14 Differentiators ● Most clients are substantial, high profile accounts spanning broad geographic areas, representing significant revenue and having

diverse and complex needs ● Negotiates sales terms with considerable discretion at high levels of client organizations ● Leads medium to large sales teams, but without supervisory authority ● Is recognized as a best practice expert in several business/sales/product/service areas

Global Grade 13 Differentiators ● Some clients are high profile accounts spanning broad geographic areas, representing significant revenue and having diverse and

complex needs ● Negotiates sales terms with moderate discretion within policy guidelines ● Leads small to medium sales teams, but without supervisory authority



Methodology


Customer/Client Management and Sales Career Band (S) (continued)

S3 Career (aligns with Global Grades 11 and 12) ● Has a solid understanding of business, financials, products/services, the market and the needs of assigned accounts; may help

develop colleagues' understanding; may be recognized as an expert in one area ● Works with complex or large territory/account, products/services, sales or account management processes; may serve as team lead ● Has authority/opportunity to set and negotiate product/service terms ● Plans own territory or account approach and manages own resources ● May represent the level at which career may stabilize for many years or even until retirement

Global Grade 12 Differentiators ● Manages accounts in a large domestic or small multi-country territory ● Recognized internally as an expert in an aspect of business, financials, products/services, the market and the needs of

assigned accounts ● Typically leads a small sales team but without supervisory authority ● Trains and mentors junior staff

Global Grade 11 Differentiators ● Manages a medium domestic territory ● Develops expertise in an aspect of business, financials, products/services, the market and the needs of assigned accounts ● Leads a small sales team on an ad hoc basis to meet specific client needs ● Occasionally leads the work of small team; provides informal guidance to junior staff

S2 Intermediate (aligns with Global Grades 9 and 10) ● Continues to build knowledge of business, financials, products/services, the market or account needs ● Works with moderately complex territory/assigned accounts, products/services, sales or account management processes ● Has direct contact with clients and moderate authority/opportunity to set and negotiate product/service terms ● Is beginning to plan own territory or account approach and monitor resources

Global Grade 10 Differentiators ● Typically responsible for products/services or territories/accounts that have moderate complexity ● Works within plan dictated by manager ● Has direct contact with clients with moderate opportunity to negotiate ● May train new team members and provide input to employee performance evaluations

Global Grade 9 Differentiators ● Has structured direct contact with clients and limited authority for negotiation ● Has general knowledge of assigned products and services ● Develops competence by performing structured work assignments

S1 Entry (aligns with Global Grade 8) ● Typically requires a college or university degree or the equivalent work experience and has general awareness of business,

financials, products/services and the market ● Works with territory/account, product/services or sales process with limited complexity ● Has limited direct contact with clients and no authority/opportunity to set and negotiate product/service terms ● Relies on manager to provide planning and manage resources



Methodology


Medical Representation Career Band (V) [Pharma Only - CMR Function Only]

V4 Expert (aligns with Global Grades 13 and 14) ● Has in-depth expertise in a range of pharmaceutical products and market characteristics in one or more therapeutic areas ● Has advanced knowledge of current clinical research in assigned therapeutic area(s) and to engage in discussions with clients and

medical community contacts ● Complexity is extremely high with responsibility for the highest risk products/therapeutic area(s), commercial impact and/or the most

critical geographic territories or emerging markets ● Has an extensive network of key decision-makers within client organizations and important contacts in the medical community ● Has broad authority to set and negotiate product/service terms ● Serves as a sales and therapeutic area expert and mentors other Medical Representatives in best practices ● Provides guidance and support to other Medical Representatives in critical negotiations

Global Grade 14 Differentiators ● Most clients are high-profile accounts spanning broad geographic areas and/or emerging markets, representing significant sources

of revenue and having diverse and complex needs ● Negotiates sales terms with considerable discretion at high levels of client organizations ● Works closely with product managers, sales trainers and management to develop sales strategy and resolve complex sales and

client issues ● Is recognized as one of the top sales producers in the organization and the pharmaceutical industry

Global Grade 13 Differentiators ● Some clients are high-profile accounts spanning broad geographic areas and/or emerging markets, representing significant sources

of revenue and having diverse and complex needs ● Negotiates sales terms with moderate discretion at mid to high levels of the client organizations ● Analyzes complex client experiences and actively participates in developing sales and product strategy ● Is recognized as one of the top sales producers in the organization

V3 Specialist (aligns with Global Grade 12) ● Has comprehensive knowledge of the full range of pharmaceutical products and market characteristics in assigned therapeutic area ● Has good knowledge of current clinical research in assigned therapeutic area to engage in discussions with healthcare professionals

and managers ● Complexity is very high with responsibility for high-risk products/therapeutic area, commercial impact and/or critical geographic or

emerging markets ● Has a large network of mid and senior level healthcare professionals and managers within client organizations and the

medical community ● Has authority to set and negotiate product/service terms within established guidelines ● Identifies and communicates issues with products and clients that could affect product development, marketing and/or sales efforts



Methodology


Medical Representation Career Band (V) (continued) [Pharma Only - CMR Function Only]

V2 Career (aligns with Global Grades 10 and 11) ● Has good knowledge of a range of pharmaceutical products and market characteristics in assigned therapeutic area ● Has general awareness of current clinical research in assigned therapeutic area and provides related information during client visits ● Complexity is intermediate with responsibility for medium-risk products/therapeutic area, commercial impact and geographic or

emerging market ● Has moderate authority to set and negotiate product service terms within established guidelines

Global Grade 11 Differentiators ● Has basic knowledge of clinical research, competitors and needs of assigned accounts ● Complexity and level of risk is intermediate to high for products/therapeutic area, commercial impact and geographic or

emerging market ● Develops a network of contacts in client organizations with guidance from sales management ● Negotiates sales terms with moderate discretion ● May provide informal guidance to junior staff

Global Grade 10 Differentiators ● Develops basic knowledge of clinical research, competitors and the needs of assigned accounts ● Complexity and level of risk for products/therapeutic area, commercial impact and geographic or emerging market is moderate

to intermediate ● Relies on sales management to provide a network of contacts in client organizations ● Negotiates sales terms with limited discretion

V1 Entry (aligns with Global Grades 8 and 9) ● Has general awareness of pharmaceutical products and market characteristics in assigned therapeutic area ● Complexity is limited with responsibility for low-risk products/therapeutic area, commercial impact and geographic or

emerging market ● Presents information to healthcare professionals and managers about products and services ● Has very limited authority to set and negotiate product/service terms ● Receives management guidance and direction in developing knowledge and skills and managing resources

Global Grade 9 Differentiators ● Has a general understanding of assigned products and services ● Has structured direct contact with clients and limited authority for negotiation ● Has some related work experience involving basic concepts and procedures

Global Grade 8 Differentiators ● Develops basic understanding of products and services through on-the-job training ● Has limited direct contact with clients and no authority for negotiation ● Has limited or no related work experience



Methodology


Technical Support Career Band (T)

T4 Lead/Advanced (aligns with Global Grades 9 and 10) ● Has advanced and specialized expertise, typically developed through a combination of job-related training and considerable

work experience ● Proposes improvements to processes ● May act as a lead, coordinating and facilitating the work of others but is not a supervisor ● Works autonomously within established procedures and practices ● Spends a majority of working time performing the same work processes and activities as employees on team

Global Grade 10 Differentiators ● Performs a variety of the most complex tasks and/or may lead one or more teams ● Analyzes the most complex technical problems and delivers solutions where precedent may not exist

Global Grade 9 Differentiators ● Performs a variety of complex tasks and/or may lead a team in the performance of a variety of tasks that are often routine ● Solves complex problems of a recurring nature

T3 Senior (aligns with Global Grades 7 and 8) ● Has full proficiency in a range of technical processes or procedures (or deep skills in a single area) through job-related training and

considerable work experience ● Completes a variety of atypical assignments ● Works within defined technical processes and procedures or methodologies and may help determine the appropriate approach for

new assignments ● Works with a limited degree of supervision, with oversight focused only on complex new assignments ● Acts as an informal resource for colleagues with less experience

Global Grade 8 Differentiators ● Performs highly complex and varied tasks ● Typically has specialized external certification ● Guides and supports junior team members; may assist in their formal orientation and training

Global Grade 7 Differentiators ● Performs moderately complex and varied tasks ● May have specialized external certification ● Guides junior team members

T2 Intermediate (aligns with Global Grade 6) ● Has working knowledge and skills to perform a defined set of analytical/scientific methods or operational processes ● Applies experience and skills to complete assigned work within own area of expertise ● Works within standard operating procedures and/or scientific methods ● Works with a moderate degree of supervision

T1 Entry (aligns with Global Grade 5) ● Has basic skills in an analytical or scientific method or operational process ● Works within clearly defined standard operating procedures and/or scientific methods and adheres to quality guidelines ● Works with close supervision



Methodology


Business Support Career Band (U)

U4 Lead/Advanced (aligns with Global Grades 8 and 9) ● Has advanced and specialized expertise, typically developed through a combination of job-related training and considerable

work experience ● May act as a lead, coordinating and facilitating the work of others, but is not a supervisor ● Works autonomously within established procedures and practices ● May support the development of new and innovative solutions to complex problems ● Spends a majority of working time performing the same work processes and activities as employees on team

Global Grade 9 Differentiators ● Performs a variety of the most complex tasks and/or may lead one or more teams ● Supports the delivery of new solutions complex problems where precedent may not exist

Global Grade 8 Differentiators ● Performs a variety of complex tasks and/or may lead a team in the performance of a variety of tasks that are often routine ● May support the development of solutions to complex problems of a recurring nature

U3 Senior (aligns with Global Grade 7) ● Has full proficiency gained through job-related training and considerable work experience ● Completes work with a limited degree of supervision ● Likely to act as an informal resource for colleagues with less experience ● Identifies key issues and patterns from partial/conflicting data ● Takes a broad perspective to problems and spots new, less obvious solutions

U2 Intermediate (aligns with Global Grades 5 and 6) ● Has working knowledge and skills developed through formal training or work experience ● Works within established procedures with a moderate degree of supervision ● Identifies the problem and all relevant issues in straightforward situations, assesses each using standard procedures and makes

sound decisions

Global Grade 6 Differentiators ● Has prior relevant training or related work experience ● Performs routine tasks following specific instructions or under close supervision ● Work is clearly defined and completed according to instruction

Global Grade 5 Differentiators ● Has limited prior relevant training or work experience ● Has limited discretion to vary from established procedures

U1 Entry (aligns with Global Grade 4) ● Entry level position with little or no prior relevant training or work experience ● Acquires basic skills to perform routine tasks ● Work is prescribed and completed with little autonomy ● Works with either close supervision or under clearly defined procedures



Methodology


Production/Manual Labor Career Band (W)

W4 Lead/Advanced (aligns with Global Grades 7 and 8) ● Has advanced skills, typically gained through a combination of job-related training and considerable work experience ● May act as a lead, coordinating the work of others, but is not a supervisor ● Works autonomously within established procedures and practices ● Has developed a specialized level of skill to perform assigned tasks

Global Grade 8 Differentiators ● Performs a variety of the most complex tasks and/or may lead one or more teams ● Supports the delivery of new solutions complex problems where precedent may not exist

Global Grade 7 Differentiators ● Performs a variety of complex tasks and/or may lead a team in the performance of a variety of tasks that are often routine ● May support the development of solutions to complex problems of a recurring nature

W3 Senior (aligns with Global Grade 6) ● Has proficiency through job-related training and considerable work experience ● Completes work with a limited degree of supervision; regularly provides guidance to others with less experience ● May act as an informal resource for colleagues with less experience

W2 Intermediate (aligns with Global Grades 4 and 5) ● Has skills developed through formal training or work experience ● Works within established procedures and guidelines with limited ability to modify methods and approach ● Completes assigned tasks with a moderate degree of supervision

Global Grade 5 Differentiators ● Performs the full range of established procedures, and will typically be considered skilled through work experience ● Resolves routine issues without supervisory approval

Global Grade 4 Differentiators ● Performs most established procedures and will typically be considered semi-skilled through work experience ● Resolves routine issues with senior staff or supervisory guidance and approval

W1 Entry (aligns with Global Grades 2 and 3) ● Has little or no prior relevant training or work experience ● Works under close supervision with little autonomy ● Works with clearly defined methods and tasks that are described in detail

Global Grade 3 Differentiators ● Has limited prior relevant training or work experience ● Contributes directly to specific unskilled tasks or processes ● Has limited discretion to vary from established procedures

Global Grade 2 Differentiators ● Has no prior relevant training or work experience ● Contributes indirectly to specific unskilled tasks or processes ● Has no discretion to vary from established procedures



Methodology

Statistical Methodology Willis Towers Watson Data Services' compensation survey reports present compensation data reported by survey participants across countries and regions. The formats and content of compensation report tables are presented consistently around the world. At the same time, each report is designed to provide data relevant to specific compensation data elements, so some of the information may not appear in every report, based on what may be region or country specific. Definitions of Data Elements can be found in the Report Data Element Definitions. Data Review In accordance with our objective to publish the most representative information possible, all data are thoroughly reviewed by compensation professionals using proprietary data diagnostic programs and statistical modeling techniques. Participants are contacted to confirm job matches, resolve omissions, inconsistencies, or other questionable input, and clarify specific policy questions. Data Confidentiality Where there are limited samples, the descriptive statistics displayed will also be limited. To ensure confidentiality, statistics will only be displayed if there are five or more organizations reporting. The 10th and 90th percentiles are displayed only for samples of 10 or more. Blanks or dashes indicate instances where there are insufficient data. In addition, no organization's data dominate the sample statistics by more than 25 percent. Willis Towers Watson Data Services maintains the confidentiality of each individual organization's data, and any information published is aggregated so that individual organization data cannot be identified. Under no circumstances will we disclose individually identified data. Incumbent and Organization-Weighted Statistics For incumbent-weighted statistics, the compensation and scope figures reported for each incumbent are used to compute the descriptive statistics. No organization's data dominates the results by more than 25 percent. For organization-weighted (company weighted) statistics, one average figure is computed for each organization on each compensation and scope element; then descriptive statistics are computed from these averages. Organization-average statistics weigh each participant's input on an equal basis, regardless of the number of incumbents reported.



Methodology

Statistical Methodology (continued) Descriptive Statistics The descriptive statistics presented in the tables are:

● Average ● 25th Percentile or 1st Quartile

● 50th Percentile or Median ● 75th Percentile or 3rd Quartile

● 10th Percentile or Lower Decile ● 90th Percentile or Upper Decile

Average Indicates the average result obtained when considering each company with a unitary weight. In company-weighted statistics, all of the companies influence this measure equally, regardless of the number of data points reported. 90th Percentile or Upper Decile Indicates the result obtained when organizing the gathered data in order of magnitude from the lowest to the highest and then selecting the value that separates the sample in such a way that 10% of the reported data points are above and 90% are below. 75th Percentile or 3rd Quartile Indicates the result obtained when organizing the gathered data in order of magnitude from the lowest to the highest and then selecting the value that separates the sample in such a way that 25% of the reported data points are above and 75% are below. 50th Percentile or Median Indicates the result obtained when organizing the gathered data in order of magnitude from the lowest to the highest and then selecting the value that separates the sample in such a way that 50% of the reported data points are above and 50% are below. 25th Percentile or 1st Quartile Indicates the result obtained when organizing the gathered data in order of magnitude from the lowest to the highest and then selecting the value that separates the sample in such a way that 75% of the reported data points are above and 25% are below. 10th Percentile or Lower Decile Indicates the result obtained when organizing the gathered data in order of magnitude from the lowest to the highest and then selecting the value that separates the sample in such a way that 90% of the reported data are above and 10% are below.



Methodology

Statistical Methodology (continued) Geographic data presentations are available for the United States and then by regions, subregions, geographic regions, and metropolitan areas (as sample size permits). All areas are presented alphabetically within each of the geographic groupings. For example, the data contributed by an organization in Chicago may be found in several geographic groupings, such as the following:

Region: North Central Subregion: Great Lakes States Geographic Region: Illinois Metropolitan Area: Chicago-Naperville-Joliet, IL-IN-WI The following map provides a graphic display of the Regions, Subregions, Geographic Regions, and Metropolitan Areas that comprise the five regions and 11 subregions.

Arraying the Data It is important to note that each line of data is independently arrayed. For example, the 25th percentile base salary may be $80,000 and the 25th percentile annual incentive may be $6,000. But this does not mean that incumbents earning $80,000 typically have total annual compensation of $86,000. There are two primary reasons that the data presented are independently arrayed. First, it more accurately depicts the range of data submitted to the database. Additionally, this approach protects the confidentiality of each participant's data. To more accurately reflect incentive practices, the bonus as a percent of base, target bonus percent and long-term incentive statistics shown are based only on receivers.



Methodology

Statistical Methodology (continued) Average and Median Statistics The average and median statistics measure the central tendency of the data reported. The average value is the sum of each data input divided by the total number of inputs. The median is the center value (50th percentile) of the distribution, or the value in the middle of an odd numbered array of data when the values are ordered by magnitude. Half of the values in the sample fall above this number and half fall below it. For example, if 11 incumbents were reported, the median would be the sixth highest value. When the array contains an even number of values, the median is midway between the central values. The advantage of the median as a measure of central tendency is that it is unaffected by individual extreme values (low or high). However, a disadvantage of the median is that it is unaffected by changes in the entire upper and lower half of the distribution. Percentiles The 25th percentile value is the point below which lie 25 percent of the sample values. The 75th percentile value is the point below which lie 75 percent of the sample values. By looking at the dispersion of data, the 25th and 75th percentiles indicate how well the average and median describe the sample. The 10th percentile value is the point below which lie 10 percent of the sample values. The 90th percentile is the point below which lie 90 percent of the sample values. The 10th and 90th percentiles provide a check on the appropriateness of the job matches. Percentiles in the report are based on organization-average statistics. Both Incumbent-weighted and organization-average statistics are included in the spreadsheets in our online data delivery software. Long-Term Incentive Valuation Methodology [Applicable to Total Direct Compensation (TDC) only]

In order to derive total direct compensation, that is, the sum of base salary, annual incentives and the value of long-term incentives, a dollar value must be established for the long-term incentive award or grant. The value should be one that allows a company to compare its long-term plan's worth to other companies'. The standard methodology for presentation in our U.S. survey reports is Accounting Value. Our proprietary valuation methodology is available to users of Comp Online™, our online data delivery tool. The basic objective of valuing long-term incentives is to measure the annualized expected value of the awards at the time of grant. The expected value of a grant is the present value of the expected future gains from the grant. For securities that trade in public markets, the present value of the expected future gains from the security is simply the current market price of the security.



Methodology

Statistical Methodology (continued) Accounting Value Accounting values are used by participants for financial reporting and/or disclosure purposes. The values reflect "fair values" under ASC 718 (formerly FAS 123[R]), the U.S. accounting standard, and are the amounts that public companies discuss in their proxy statement CD&A report and disclose in their Grants of Plan-Based Awards table. For each stock option, restricted stock, or other performance award, the accounting value is the value determined by the company and reported to the survey. Values reflect the grant date accounting value per unit of the award and do not include any adjustments for actual or expected award forfeitures. Awards which result in specified cash payments at the conclusion of the performance or vesting period are reported based on the expected payout value of the award. For stock options, accounting values reported by participants are calculated using an option pricing model. The type of model and the factors used in the model, such as the risk-free interest rate, volatility, and dividend yield, are all determined by the participant for financial reporting purposes. If a stock option has price hurdles, this performance feature should be accounted for in the value. The term used in the model should be the expected life of the option, and no other adjustments should be made for vesting or forfeiture. For time-vesting Restricted Stock, the accounting value reported by participants is typically the grant value. If dividends are typically paid, but dividends are not attached to the Restricted Stock award, the accounting value should reflect this feature. For Restricted Stock or Performance Plans that have non-stock-based performance criteria, the accounting value reported is typically target value at grant. If dividends are typically paid, but dividends are not attached to the award, the accounting value should reflect this feature. For Restricted Stock or Performance Plans that have stock-based performance criteria (e.g., stock price hurdles or Total Shareholder Return), the accounting values reported should reflect this feature. Plans having stock-based performance criteria are known as "market based" and will typically have accounting values that are 5 to 10 percent above or below grant value. The majority of companies in our database report accounting values. If a participant cannot report an accounting value, Willis Towers Watson will estimate a grant date fair value for their long-term grants based on public disclosures, historical data and financial reporting standards.



Methodology

Statistical Methodology (continued) Composition of Total Direct Compensation The following text describes the compensation totals used by Willis Towers Watson Data Services globally and the data elements included in each total. Because compensation programs vary by country, either by statute or custom, only those elements that are relevant to the market are included. In some markets where it may be important to distinguish compensation elements such as specific types of allowances, an expanded version of the elements are collected and reported.

Base Salary 12 Months: The full-time equivalent (FTE) of Twelve Months of Basic Guaranteed Salary or Base Salary, prior to any deductions such as salary sacrifices. Base Salary: The current full-time equivalent (FTE) annual base salary, including any guaranteed additional fixed payments such as holiday pay and any extra-contractual months required by law, collective agreement or organization practice. This is a fixed amount, typically paid in monthly payments. Total Guaranteed Compensation: Base Salary + Total Fixed Cash Allowances Total Annual Compensation: Total Guaranteed Compensation + Short-Term Incentives (e.g., bonus, commissions, sales incentives, profit-sharing, etc.). Total Direct Compensation: Total Compensation + Long-Term Incentives (e.g., Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Shares, Deferred Bonus). Total Rewards: Total Direct Compensation + Total Value of Benefits


Methodology - Society for Human Resource …2018 General Industry Middle Management, Professional and Support Compensation Survey Report - U.S. Methodology Job Matching Methodology

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